Moody’s Investor Services has released an issuer comment on December 8, 2025, regarding InterGlobe Aviation Limited (IndiGo). The report discusses the impact of recent flight disruptions caused by new aviation regulations and weather conditions. While maintaining IndiGo’s Baa3 rating, Moody’s highlights concerns about planning lapses and potential financial impacts. The airline faces challenges in restoring full schedules and complying with regulatory changes.
Regulatory Challenges and Flight Disruptions
On December 5, 2025, India’s aviation regulator provided temporary exemption to IndiGo from new regulations on flight duty times for pilots. This followed significant flight delays and cancellations. The disruptions were caused by a mix of regulatory changes and winter weather conditions.
Credit Negative Impact
The disruptions are credit negative because IndiGo could face financial damage from lost revenue and compensation to customers, and potential penalties. A show cause notice has been issued to IndiGo’s executives.
Planning Lapses and Operational Issues
The new Flight Duty Time Limitation (FDTL) regulations went into effect on November 1, 2025. IndiGo’s lean operations lacked the resilience needed for the new regulations, leading to cancellations. IndiGo’s on-time performance dropped to 68% in November.
Recovery and Schedule Restoration
Following a schedule reset, IndiGo has gradually restored services. As of early December, 1,650 of its 2,200 daily flights are operational, with a return to full schedules expected by mid-December.
DGCA Exemption and Future Compliance
The exemption from the DGCA remains effective until February 10, 2026, subject to review every 15 days. IndiGo must submit reports detailing crew utilization and compliance measures. A 30-day roadmap for full compliance with FDTL regulations is required.
Moody’s Assessment and Rating
Moody’s has downgraded IndiGo’s issuer category score for human capital to 4 from 3, reflecting the impact of slower hiring. Moody’s governance issuer category score remains at 3. Although the fundamentals of IndiGo’s Baa3 rating remain intact, the airline’s profitability will be negatively impacted in the current fiscal year ending March 31, 2026.
Source: BSE
